Invest in Private Equity in Europe

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Tap into one of Europe’s highest performing asset classes.

You may be unhappy with your current portfolio and it may be time to explore new options. Looking into offshore options is a great way to open up your investment portfolio to great markets, secure banking, and tax advantages.

When you are ready to take your money offshore, you should start by looking at private equity in Europe. Private equity is an investment in equity in a private company that is not listed on the stock exchange. This kind of investment is typically medium to long-term and includes active ownership in the company. Private equity investments can significantly strengthen a company’s management experience and give them access to new markets while providing solid returns to the investor.

A Look into European Private Equity

While the Eurozone is experiencing some difficulties, the private equity investments are performing very well. They are matching, if not exceeding, that of the US in terms of returns.

Across the continent, private equity investments have reached 71.7 billion euro in the past decade. That’s a 29% increase. In 2018, Invest Europe conducted a study and found that nearly 7,000 European companies have earned help through investors. 87 percent of these companies were small and medium. This is an 87% increase from the year before.

Why are people investing in private equity? The returns can be promising in profitable, mid-sized companies in Europe. This very attractive for investors. There is also a worldwide demand for the asset class and a period of low interest rates, aided by strong economic conditions. Let us look at some statistics:

  • Around 3,800 European companies were sold last year, adding up to 42.7 billion euro, 7% higher than the year prior. That is also a decade record.
  • 29% of all capital was raised by pension funds. Funds of funds accounted for 20%. Family offices and private individuals made up 15%. Sovereign wealth funds contributed 9% and insurance companies made up 8%.
  • There was an 18% increase in private equity in consumer goods and service companies, making up 24% of its total.
  • Technology companies also hit a decade high, experiencing a 6% increase in equity, representing 17% of the total.
  • France and Benelux companies received nearly one-third of private equity investments in 2017.
  • UK and Ireland-based companies received 26% of the investments.
  • Central European companies received 5% of the private equity investments.

The high performance of these kinds of investments may be thanks to the economic growth in the European Union, which grew 2.4% last year and has been experiencing growth the past decade. The global demand for private equity as risen.

How to Invest in Private Equity

If you are ready to invest in private equity, you’ll need to choose how you are going to invest. Investors should keep in mind that private equity investments typically require for a minimum investment. Some firms want their investors to commit millions of dollars. Others only ask for a few hundred thousand, which is out of budget for some investors.

One way you can do it is through funds. These funds hold shares of private partnerships which invest in private equities. With a fund, firms can increase cost effectiveness and reduce the minimum investment requirement. They can also provide more diversification since the funds may be investing in hundreds of companies at different stages of venture capital within various industry sectors.

Private equity ETFs are also an option. Exchange-traded funds track the indexes of publicly traded companies that invest in private equity. With this option, you don’t have to concern yourself with minimum investment requirements because you buying shares over the stock exchange. With ETFs there is the potential for additional fees such as management expenses which you wouldn’t encounter with a direct investment in private equity.

Tips for Going Offshore

To take full advantage of offshore markets, opening up a bank account in a new country will be the best way to assure asset protection and tax benefits. Banking offshore can diversify your portfolio and is the first step in moving your assets out of your country. Opening a bank account offshore also plays a key role in forming an offshore corporation, offshore SD IRA, or international trust. Many offshore banks offer investment opportunities, managed investment accounts, and foreign exchange services.

Offshore banking also has the added benefit of confidentiality, especially in countries like Switzerland where they take your trust very seriously.

Some investors seek out offshore investment for the tax benefits. These incentives benefit the investor as well as encourage growth of their own economy by attracting wealth from other countries.

You have the opportunity to achieve both personal and financial liberation overseas by tapping into new and developing sectors, and developed areas of investment, allowing and encouraging you to diversify your portfolio.

Alpen Partners

Your wealth is important. If you are serious about your life goals, financial planning and investments are probably important to you. Financial planning can involve many steps from tax optimization to asset protection. Different investments have different rules with different returns.

With the help of financial planning, you will be able to predict where you will be in the years to come by evaluating where you are currently, what sources of income you plan to have in the future, investments you plan to make, and your retirement plans.

Alpen Partners Wealth Management International AG, the sister company of Alpen Partners AG, is now a registered investment advisor with the U.S. Securities and Exchange Commission (SEC). Together with our partner Swiss private banks, our company can now offer the full Swiss private banking experience to American clients, both resident and non-resident.

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